A subsidiary of UK defence giant BAE Systems has agreed to pay a $30m (£17m) settlement to the US government in a case about defective body armour.

Armor Holdings is also co-operating with a wider US probe into the body armour industry's use of a material that the US claims degrades over time.

But the company denies it made and sold bullet-proof vests while knowing the material, Zylon, was unsuitable.

US police forces and other emergency services have bought vests using Zylon.

The United States Department of Justice had accused Armor Holdings of knowingly making and selling bullet-proof vests despite having information that a key material used in their manufacture was unsuitable.

In a statement on its website, the department welcomed the settlement and agreement of co-operation.

Gregory Katsas, the assistant attorney general for the Civil Division, said: "The Justice department will not tolerate its first responders wearing defective bullet-proof vests.

"This settlement will help ensure that first responders receive the highest quality ballistic protection."